Be it tiding over an emergency or reaching your long-term financial goals, credit is an integral facet of our lives of today. While the type of credit that you choose to rely on may vary depending on your preference, it is important to know that there are a number of credit facilities that are at your disposal.
Can Consumer Behaviour Impact Your Line of Credit?
The credit facilities available to an individual is greatly influenced by their consumer behaviour. Be it approving a personal loan or a credit card application, most lenders tread cautiously unless the applicant comes with a proven track record of timely payments or a high credit score and report. In cases where the credit score or report drops below the asking point, the lenders are wary to approve any form of credit as the risk of investment is greater in this instance.
Must Read: How to Improve Your CIBIL Score?
5 Benefits of Having a High CIBIL Score for Personal Loan Applications
The value of good consumer behaviour is immense as it directly influences the credit underwriting and approval process. Therefore, it can also be agreed that having a high CIBIL score can work in your favour to accessing all types of credit facilities.
The top 5 benefits of a high CIBIL score are:
- Quick Approvals for Personal Loans: Your credit profile along with your repayment behaviour in the past is reflected in your CIBIL score. Having a high score assures lenders that you are a creditworthy applicant for a personal loan. A score of 750 and above will help lenders make quick loan approval decisions.
- Avail Competitive Interest Rates & Processing Fees: The benefit of a high CIBIL score also allows applicants to enjoy preferential personal loan interest rates and discounted or no processing fees on their personal loans. In the long run, borrowers save a lot when availing of competitive interest rates, especially on high ticket personal loans. The monthly instalment amount becomes more affordable too.
- Pre-approved Loan Offers: Having a good CIBIL score ensures that applicants may be already pre-approved for a specified personal loan amount. Many of the pre-approved personal loan offers come with add-on benefits like credit cards. Most importantly, being pre-approved for credit translates into reaching your financial goals sooner rather than later.
- Be In a Position To Negotiate: Lenders are more inclined to approve personal loan applications from candidates with a high CIBIL score. This puts them in an advantageous position to negotiate on getting more affordable rates of interest, repayment tenures according to their convenience and waivers on related fees and charges.
- Enjoy Longer Loan Tenures: Lenders may be willing to be flexible with your loan repayment tenure if you have a high CIBIL score. This also means a reduced credit burden over a longer period of time. Your monthly instalments are more on the economical spectrum of the scale helping you to balance your finances more efficiently.
How Can You Check Your Eligibility for a Personal Loan?
You can check your personal loan eligibility simply by visiting the SMFG India Credit website prior to making your loan application. General parameters include:
- Be a citizen of India
- Be between 21 and 60 years of age at the time of loan application
- Be a salaried employee at a private or public enterprise or demonstrate a regular source of income for self-employed individuals
- Have a minimum CIBIL score of 750
Must Read: How to Build Your Credit Score with a Personal Loan?
The basic documents required for a personal loan to be approved are:
- Establish proof of identity via any one of the government-approved IDs like the Passport, Voter ID, Driving License, PAN Card
- Show proof of address through one of these documents using Driving License, Passport, Bank Passbook or Statement
- Demonstrate proof of income with the help of:
A.) Salary slips for 3 months and banks statements of the past 6 months for salaried employees
B.) Banks statements and income statements for self-employed individuals or business owners
Building a high CIBIL score may be easy but maintaining it is tough. It is important that you remain focused on persisting with good credit behavior by highlighting favorable credit habits. This ensures that you are rewarded for being credit conscious and are eligible to avail credit at the time you need it the most.